Goodwill CEO for WNC earns $315K

Salary in line with peers; expert says public decides what's appropriate

Published: Sunday, April 21, 2013 at 4:30 a.m.

Last Modified: Saturday, April 20, 2013 at 12:04 p.m.

Art Gibel is a CEO who makes $315,318 per year. In the private business sector, that may not seem like a lot.

Gibel, however, is the head of Goodwill Industries of Northwest North Carolina Inc., a nonprofit that operates stores in 32 North Carolina counties. That footprint starts in Forsyth County, where its Winston-Salem headquarters is located, and stretches westward to Cherokee County. The region includes three stores in Henderson County.

Despite the expansive geographic footprint, Gibel's salary has caused some raised eyebrows. Goodwill is a nonprofit that deals daily with low-income families who visit stores to buy used goods such as clothing, furniture and technology.

Henderson County residents also donate thousands of items to the three locations. Last year, the three county stores generated revenue of $3.26 million. That same year, county residents made 72,454 donations. Donations are calculated by visit; for example, a person who goes to a location and drops off a lamp, a pair of shoes and a bag of clothes is counted as one donation by Goodwill.

The News and Observer in Raleigh created an outcry of objections earlier this year when the paper reported that the CEO of Goodwill Industries of Eastern North Carolina Inc. and his wife together make more than $800,000.

Gibel isn't the only administrator to make a six-digit salary at the corporate office, which is located in Winston-Salem. Seven other administrators make more than $100,000, according to tax documents.

But how much is too much?

'A different world'

Margaret Henderson is a professor at the University of North Carolina at Chapel Hill. She teaches nonprofit courses in the School of Government and is the director of the Public Intersection Project at www.publicintersection.unc.edu.

The first mention of Gibel's salary caused her eyebrows to rise, she said.

"It's rare to see a six-figure salary for a community-based nonprofit," Henderson said.

While Goodwill may seem community-based, it doesn't fall into that category because it has a corporate office with centers that span multiple counties. Community-based organizations are smaller and are almost entirely dependent on the town they reside in, Henderson said.

"The closer you are to the funding sources, the closer you are to accountability," she added.

Goodwill isn't doing anything wrong, Henderson said, and Gibel can make that much money because he's far away from most of the communities that his centers reside in. People are less likely to know that he makes a large salary, she said.

"It's a different world from your community-based nonprofits," Henderson added.

Henderson said one thing that sets Goodwill apart from community-based organizations is that it falls under an umbrella organization. Goodwill Industries International monitors all of the Goodwills around the world.

Within the Goodwill structure, area directors or CEOs tend to make more money, she said.

Goodwill's infrastructure

The makeup of Goodwill is a little different than other nonprofits. Goodwill stores are located in the communities they help, but the powers-that-be are not.

Aside from the Northwest corporation, there are three other Goodwills in North Carolina. Goodwill Industries of Southern Piedmont covers Mecklenberg County and comes as far west as Polk and Rutherford counties. Goodwill Industries of Central North Carolina operates primarily in the Triad area covering Alamance and Guilford counties. Goodwill Industries of Eastern North Carolina stretches from Cary to the coast.

The Goodwill brand is protected Goodwill Industries International, and there are 165 affiliated nonprofits functioning around the world. Of that number, 158 are operating in the United States.

The Goodwill organizations operate independently of one another and are run loosely within the construct of Goodwill. The international organization has a 33-member board made up of business leaders from around the world, and that board monitors the 165 companies to ensure the Goodwill brand is protected.

They also offer information and training and lobby on behalf of the independent organizations.

Each Goodwill organization, however, answers to a local board of directors, Gibel said, adding that "We're very independent."

Each of the individual organizations is "based on community needs," he said, and the national brand doesn't have any control. The 165 companies all have varying but similar mission statements.

The mission statement for Northwest North Carolina is: "We create opportunities for people to enhance their lives through training, workforce development services and collaboration with other community organizations."

Gibel works directly for the board of directors that hired him. That process happens without advisement from the international company.

When Gibel was hired, the Northwest board of directors held a national search. Gibel was CEO of a subsidiary of Hanes Brands Inc. and was serving on the board of directors for Goodwill of Northwest North Carolina Inc. when he retired in 2004. He applied for the Goodwill CEO position in 2006.

Gibel has been Goodwill CEO for the past seven years, and while his salary may seem large, it's less than half of what he was making in the private sector.

It's also on par with what others in Goodwill make around the country. Gibel's salary is examined by a private company every year. That company — Mercer — then presents its findings to the board of directors without Gibel in the room.

The numbers

Mercer will examine Goodwill of Northwest North Carolina as a whole and compare it to other similar entities in the region, Gibel said.

A report is then given to the board, and Gibel is not privy to what it says. The board examines and discusses his salary.

"The real question is how effective you're being," Gibel said, which is determined by the board.

In a glance around the country, Gibel's $315,318 salary appears to be in line with other CEOs within the Goodwill industries. Jim Gibbons, president and CEO of Goodwill Industries International, makes $725,286 per year. William Forrester, president and CEO of Goodwill Industries of Greater New York Inc., makes $566,138.

In South Carolina, there are two CEOs. Pat Michaels handles the Upstate and Midlands and makes $222,880, while Robert Smith handles the lower state, making $268,832 per year.

The salaries are listed on tax documents filled out by each nonprofit.

The Mercer report takes all of that information into consideration, but Gibel reiterates that the most important thing is impact. His Goodwill corporation has been in the top three in the entire Goodwill organization based on efficiency with donations, he said.

'Magic line'

In the nonprofit world, there are no firm guidelines as to what an executive should be paid.

The Better Business Bureau calls for 60 percent of funds to be put back into the actual mission of the nonprofit. United Way of Henderson County calls for 75 percent of funds to find its way back into the mission of the nonprofit.

While the Better Business Bureau and others recommend that only between 25 and 40 percent be spent on overhead costs, Goodwill of Northwest North Carolina is only using 10 percent of its dollars for administrative costs.

The common practice for Goodwill of Northwest North Carolina is to funnel 91 cents of every dollar back into the services offered, said Jaymie Eichorn, vice president of marketing and communications.

"We are dependent on the generosity of our donors and shoppers, and we take our responsibility seriously," she said. "We pride ourselves on being good stewards of the community resources."

Gibel echoes those sentiments.

"We work diligently to keep (administrative costs) down," he said.

The amount spent on administrative costs has dropped 4 percent since he took over in 2006, Gibel added.

If someone purchases a shirt that costs $5 at a Goodwill of Northwest North Carolina store, 95 percent of that money will go to support the mission, infrastructure and growth, Gibel said.

"We want to see more people served and more services added to our locations," he said.

While guidelines do not exist, there are checks and balances, said Henderson, the UNC professor. It's about what the public will tolerate, she said, which is complicated when the corporate office is hundreds of miles away.

"There's a magic line at which the salaries become too generous and not accepted by the public," she said. "Something will cause a community to look at that salary and that organization."

Once that salary crosses the threshold, it can "become a target," Henderson said. "The important thing is people do the investigation for what makes them comfortable with their own donations."

Gibel is relying on Goodwill's strong brand to ease consumers' and donors' concerns — a brand that he has strengthened since becoming CEO.

Goodwill's mission

While Henderson's eyebrows might rise at Gibel's salary, she says Goodwill is an important part of communities. And Goodwill's impact has been seen in Henderson County.

"Goodwill has invested a substantial amount of investment in the Henderson County community through retail stores, donation centers and career centers, which offer free services to job-seekers in the community," Eichhorn said.

The Henderson County Career Connections opened in February 2011. That center, which employs three people, has served 2,914 people and found jobs for 394 of them.

At Blue Ridge Community College, Goodwill has sponsored GED preparation and computer basics courses. The county has three stores and a donation center, which employ 27 people.

And those things are what justify the administrative costs taken on by Goodwill, Gibel said.

For him, it's about impact and the size of the footprint.

"The key is to focus on the results that are being generated," he said.

Those results have been positive in the seven years he's run the Goodwill company, he said. On his watch, the number of services and locations has risen. The number of people receiving services from Goodwill has grown from about 7,000 to upwards of 50,000, he estimated.

Public opinion

With only loose guidelines, it ultimately falls on those who donate and those who purchase to decide what is an acceptable range of income for Gibel and other CEOs of Goodwill.

The nonprofit is set up like a business in the private sector, but it doesn't make its money that way.

Across the country, Goodwill organizations take in more than a billion dollars annually, and Goodwill of Northwest North Carolina recorded more than $50 million in gross revenues last year. The stores stay busy.

"We don't want a world where they're not doing that work," Henderson said. "They're fulfilling a need."

With that said, Henderson warned that large nonprofits such as Goodwill need to be "aware of perception as well as content."

Once that "magic line" that Henderson said exists is crossed, there could be a backlash, as there was in Eastern North Carolina after the News and Observer story on Goodwill salaries there.

In the end, however, Gibel is convinced that the positive image of the Goodwill brand and the services that Goodwill offers will negate any concern about salaries at the corporate headquarters.

<p>Art Gibel is a CEO who makes $315,318 per year. In the private business sector, that may not seem like a lot. </p><p>Gibel, however, is the head of Goodwill Industries of Northwest North Carolina Inc., a nonprofit that operates stores in 32 North Carolina counties. That footprint starts in Forsyth County, where its Winston-Salem headquarters is located, and stretches westward to Cherokee County. The region includes three stores in Henderson County. </p><p>Despite the expansive geographic footprint, Gibel's salary has caused some raised eyebrows. Goodwill is a nonprofit that deals daily with low-income families who visit stores to buy used goods such as clothing, furniture and technology. </p><p>Henderson County residents also donate thousands of items to the three locations. Last year, the three county stores generated revenue of $3.26 million. That same year, county residents made 72,454 donations. Donations are calculated by visit; for example, a person who goes to a location and drops off a lamp, a pair of shoes and a bag of clothes is counted as one donation by Goodwill.</p><p>The News and Observer in Raleigh created an outcry of objections earlier this year when the paper reported that the CEO of Goodwill Industries of Eastern North Carolina Inc. and his wife together make more than $800,000. </p><p>Gibel isn't the only administrator to make a six-digit salary at the corporate office, which is located in Winston-Salem. Seven other administrators make more than $100,000, according to tax documents. </p><p>But how much is too much?</p><h3>'A different world'</h3>
<p>Margaret Henderson is a professor at the University of North Carolina at Chapel Hill. She teaches nonprofit courses in the School of Government and is the director of the Public Intersection Project at www.publicintersection.unc.edu. </p><p>The first mention of Gibel's salary caused her eyebrows to rise, she said. </p><p>"It's rare to see a six-figure salary for a community-based nonprofit," Henderson said. </p><p>While Goodwill may seem community-based, it doesn't fall into that category because it has a corporate office with centers that span multiple counties. Community-based organizations are smaller and are almost entirely dependent on the town they reside in, Henderson said.</p><p>"The closer you are to the funding sources, the closer you are to accountability," she added. </p><p>Goodwill isn't doing anything wrong, Henderson said, and Gibel can make that much money because he's far away from most of the communities that his centers reside in. People are less likely to know that he makes a large salary, she said. </p><p>"It's a different world from your community-based nonprofits," Henderson added. </p><p>Henderson said one thing that sets Goodwill apart from community-based organizations is that it falls under an umbrella organization. Goodwill Industries International monitors all of the Goodwills around the world. </p><p>Within the Goodwill structure, area directors or CEOs tend to make more money, she said.</p><h3>Goodwill's infrastructure</h3>
<p>The makeup of Goodwill is a little different than other nonprofits. Goodwill stores are located in the communities they help, but the powers-that-be are not. </p><p>Aside from the Northwest corporation, there are three other Goodwills in North Carolina. Goodwill Industries of Southern Piedmont covers Mecklenberg County and comes as far west as Polk and Rutherford counties. Goodwill Industries of Central North Carolina operates primarily in the Triad area covering Alamance and Guilford counties. Goodwill Industries of Eastern North Carolina stretches from Cary to the coast.</p><p>The Goodwill brand is protected Goodwill Industries International, and there are 165 affiliated nonprofits functioning around the world. Of that number, 158 are operating in the United States. </p><p>The Goodwill organizations operate independently of one another and are run loosely within the construct of Goodwill. The international organization has a 33-member board made up of business leaders from around the world, and that board monitors the 165 companies to ensure the Goodwill brand is protected.</p><p>They also offer information and training and lobby on behalf of the independent organizations. </p><p>Each Goodwill organization, however, answers to a local board of directors, Gibel said, adding that "We're very independent." </p><p>Each of the individual organizations is "based on community needs," he said, and the national brand doesn't have any control. The 165 companies all have varying but similar mission statements. </p><p>The mission statement for Northwest North Carolina is: "We create opportunities for people to enhance their lives through training, workforce development services and collaboration with other community organizations."</p><p>Gibel works directly for the board of directors that hired him. That process happens without advisement from the international company.</p><p>When Gibel was hired, the Northwest board of directors held a national search. Gibel was CEO of a subsidiary of Hanes Brands Inc. and was serving on the board of directors for Goodwill of Northwest North Carolina Inc. when he retired in 2004. He applied for the Goodwill CEO position in 2006.</p><p>Gibel has been Goodwill CEO for the past seven years, and while his salary may seem large, it's less than half of what he was making in the private sector. </p><p>It's also on par with what others in Goodwill make around the country. Gibel's salary is examined by a private company every year. That company — Mercer — then presents its findings to the board of directors without Gibel in the room.</p><h3>The numbers</h3>
<p>Mercer will examine Goodwill of Northwest North Carolina as a whole and compare it to other similar entities in the region, Gibel said.</p><p>A report is then given to the board, and Gibel is not privy to what it says. The board examines and discusses his salary. </p><p>"The real question is how effective you're being," Gibel said, which is determined by the board. </p><p>In a glance around the country, Gibel's $315,318 salary appears to be in line with other CEOs within the Goodwill industries. Jim Gibbons, president and CEO of Goodwill Industries International, makes $725,286 per year. William Forrester, president and CEO of Goodwill Industries of Greater New York Inc., makes $566,138. </p><p>Dennis McLain, CEO of Goodwill Industries of Eastern North Carolina Inc., makes $430,239, and Richard Gorham, CEO of Goodwill Industries of Central North Carolina, makes $304,441. Michael Elder, CEO of Goodwill Industries of Southern Piedmont, makes $289,596.</p><p>In South Carolina, there are two CEOs. Pat Michaels handles the Upstate and Midlands and makes $222,880, while Robert Smith handles the lower state, making $268,832 per year.</p><p>The salaries are listed on tax documents filled out by each nonprofit.</p><p>The Mercer report takes all of that information into consideration, but Gibel reiterates that the most important thing is impact. His Goodwill corporation has been in the top three in the entire Goodwill organization based on efficiency with donations, he said.</p><h3>'Magic line'</h3>
<p>In the nonprofit world, there are no firm guidelines as to what an executive should be paid.</p><p>The Better Business Bureau calls for 60 percent of funds to be put back into the actual mission of the nonprofit. United Way of Henderson County calls for 75 percent of funds to find its way back into the mission of the nonprofit.</p><p>While the Better Business Bureau and others recommend that only between 25 and 40 percent be spent on overhead costs, Goodwill of Northwest North Carolina is only using 10 percent of its dollars for administrative costs. </p><p>The common practice for Goodwill of Northwest North Carolina is to funnel 91 cents of every dollar back into the services offered, said Jaymie Eichorn, vice president of marketing and communications.</p><p>"We are dependent on the generosity of our donors and shoppers, and we take our responsibility seriously," she said. "We pride ourselves on being good stewards of the community resources."</p><p>Gibel echoes those sentiments.</p><p>"We work diligently to keep (administrative costs) down," he said. </p><p>The amount spent on administrative costs has dropped 4 percent since he took over in 2006, Gibel added. </p><p>If someone purchases a shirt that costs $5 at a Goodwill of Northwest North Carolina store, 95 percent of that money will go to support the mission, infrastructure and growth, Gibel said.</p><p>"We want to see more people served and more services added to our locations," he said.</p><p>While guidelines do not exist, there are checks and balances, said Henderson, the UNC professor. It's about what the public will tolerate, she said, which is complicated when the corporate office is hundreds of miles away.</p><p>"There's a magic line at which the salaries become too generous and not accepted by the public," she said. "Something will cause a community to look at that salary and that organization."</p><p>Once that salary crosses the threshold, it can "become a target," Henderson said. "The important thing is people do the investigation for what makes them comfortable with their own donations." </p><p>Gibel is relying on Goodwill's strong brand to ease consumers' and donors' concerns — a brand that he has strengthened since becoming CEO.</p><h3>Goodwill's mission</h3>
<p>While Henderson's eyebrows might rise at Gibel's salary, she says Goodwill is an important part of communities. And Goodwill's impact has been seen in Henderson County.</p><p>"Goodwill has invested a substantial amount of investment in the Henderson County community through retail stores, donation centers and career centers, which offer free services to job-seekers in the community," Eichhorn said.</p><p>The Henderson County Career Connections opened in February 2011. That center, which employs three people, has served 2,914 people and found jobs for 394 of them. </p><p>At Blue Ridge Community College, Goodwill has sponsored GED preparation and computer basics courses. The county has three stores and a donation center, which employ 27 people. </p><p>And those things are what justify the administrative costs taken on by Goodwill, Gibel said.</p><p>For him, it's about impact and the size of the footprint. </p><p>"The key is to focus on the results that are being generated," he said.</p><p>Those results have been positive in the seven years he's run the Goodwill company, he said. On his watch, the number of services and locations has risen. The number of people receiving services from Goodwill has grown from about 7,000 to upwards of 50,000, he estimated.</p><h3>Public opinion</h3>
<p>With only loose guidelines, it ultimately falls on those who donate and those who purchase to decide what is an acceptable range of income for Gibel and other CEOs of Goodwill. </p><p>The nonprofit is set up like a business in the private sector, but it doesn't make its money that way. </p><p>Across the country, Goodwill organizations take in more than a billion dollars annually, and Goodwill of Northwest North Carolina recorded more than $50 million in gross revenues last year. The stores stay busy.</p><p>"We don't want a world where they're not doing that work," Henderson said. "They're fulfilling a need."</p><p>With that said, Henderson warned that large nonprofits such as Goodwill need to be "aware of perception as well as content."</p><p>Once that "magic line" that Henderson said exists is crossed, there could be a backlash, as there was in Eastern North Carolina after the News and Observer story on Goodwill salaries there. </p><p>In the end, however, Gibel is convinced that the positive image of the Goodwill brand and the services that Goodwill offers will negate any concern about salaries at the corporate headquarters.</p><p>"We have a lot of pride in what we do for the community," he said.</p><p>Reach Millwood at 828-694-7881 or at joey.millwood@blueridgenow.com.</p>